Question: (Calculating changes in net operating working capital) Duncan Motors is introducing a new product and has an expected change in net operating income of $305,000.
(Calculating changes in net operating working capital) Duncan Motors is introducing a new product and has an expected change in net operating income of $305,000. Duncan Motors has a 33 percent marginal tax rate. This project will also produco $49,000 of depreciation per year. In addition, this project will cause the following changes in year 1: Without the Project With the Project Accounts receivable $36,000 $20,000 Inventory 29,000 39,000 Accounts payable 89,000 (Click on the icon in order to copy its contents into a spreadsheet.) What is the project's free cash flow in year 1? 49,000 SED The free cash flow of the project in year 1 is $ (Round to the nearest dollar)
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
